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If Your Super Isn’t Super, Review it Now

Ready for retirement and crunching the numbers, you review your super and there’s much less in there than you thought. Your dreams of international travel and a champagne lifestyle now have to be wound back to a weekend away every couple of years, and switching from Veuve to Yellowglen.

Except – this isn’t you, because you were on top of your super balance growth long before it came time to call it a day on your career…

Superannuation is one of the most crucial assets in achieving the lifestyle you want in retirement. With retirement savings growing over time, it’s essential to periodically review your super balance to ensure it’s working as hard as it should be.

Why Review Your Super?

As of 1 July 2025, the Superannuation Guarantee (SG) rate has increased from 11.5% to 12% of your ordinary time earnings. This final scheduled increase aims to bolster retirement savings for Australian workers. For example, a 30-year-old earning $75,000 annually is projected to be $20,000 better off at retirement due to this change.

It’s essential to ensure that your super fund is receiving the correct contributions. Review your payslips and super statements to confirm that your employer is contributing the mandated 12%. If your super is paid as part of a salary package, the increase might reduce your take-home pay unless it’s adjusted accordingly.

Regularly checking your super balance and investment performance is crucial. You can use your annual super statement to track your contributions, investment choices, and insurance coverage. The ASFA Super Detective illustrates a target super balance by age, offering a benchmark for how your super should be growing over time. For instance, if you’re in your 30s or 40s, it’s important to ensure your balance is growing at an appropriate rate, as this will likely compound over time.

Choosing the Right Super Fund

Selecting a high-performing super fund can be the difference between a comfortable retirement and a financially uncertain future. Funds that consistently perform well, like those in the top quarter of fund rankings, provide superior returns that compound over time, leading to much higher retirement balances.

The Productivity Commission’s review of superannuation highlights the disparity between funds that consistently perform well and those that don’t. For example, a 21-year-old on a $50,000 salary who chooses a high-performing fund could expect a retirement balance of $1.1 million, while choosing a lower-performing fund could result in only $610,000. The gap can be as large as 45%.

When choosing a super fund, consider factors such as long-term returns, fees, insurance offerings, and investment options. SuperGuide’s performance tables can help you compare funds in various risk categories, such as growth, balanced, and conservative. The right super fund should match your risk profile and long-term goals.

Strategies to Optimise Your Super

The increase in the SG rate provides an opportunity to boost your retirement savings. Beyond the mandatory contributions, consider strategies like salary sacrificing additional amounts into your super. This not only increases your super balance but also offers potential tax advantages.

For those with a super balance under $500,000, the carry-forward concessional contributions cap allows you to make larger contributions in years when you have unused caps from previous years. This can be particularly beneficial in years when your income is higher (more on that on the ATO’s website here).

Common Mistakes When Comparing Super Funds

There are a few common errors Australians make when they review their super and compare with other funds. Here are some to be wary of:

Super is not an asset class

Super is a tax structure. So, is it a good investment? Well, it depends where the funds are invested. Over the long term, as a form of investment savings, it works very well and the accompanying tax benefits both now, and in retirement, make it a very attractive vehicle to accumulate wealth.

Raw performance

Your fund may have earned 7% over the last financial year. My fund may have earned 10%. Does that mean mine is a better option? No, not necessarily. Returns should only be compared relative to the risk profile. If I am in a growth portfolio option and you are in a conservative option, then returns are going to differ as they are very different levels of portfolio risk, with different amounts in growth and defensive assets within the portfolio. Ensure you compare apples with apples.

Comparing short term performance

Some investment style and strategies can do very well in certain market conditions. But this won’t always be the case and will likely average out over time. Three to five should be used as a minimum.

Fees

Be aware of the different types of fees!

• Administration fee – this is the product provider or trustee charge for running the fund. This may include a member fee and a tiered admin fee based on the value of the funds invested.
• Portfolio fee – this is expressed as a percentage of the portfolio, and is the fee the fund manager or investment manager charges.
• Transaction fees – many funds will also have transactional costs to cover buy/sell brokerage costs.
• Financial adviser fees – these are a separate cost, through an arrangement with your adviser and may be charged via your super fund. Be careful to take this into account if comparing funds (it is not a product cost!).

Are lower fees better?

The lower the fees, the less they eat into your return. So in that case, yes, but:

• The administrative service, website and digital offering, ease of dealing with, level of cyber security etc are also very important. And there have been concerning cyber security examples recently that highlight this!
• A higher portfolio fee might reflect a more active strategy to manage risk/return. This can be very valuable.

Consider the promoter

This is easiest to describe by what not to do: Avoid spruikers! Don’t invest your hard-earned savings based on unsolicited “cold calling” promising high returns. These often include investing into property development using Self-Managed Super Funds. Only deal with someone who is licensed with the Australian Securities and Investment Commission (ASIC) and preferably a member of a recognised professional association (eg FAAA).

Review Your Super Now (and Enjoy the Benefits Later)

Periodically reviewing your super is essential for building a secure financial future. Your super and your house are often the most significant assets you will own. But its not as simple as a performance comparison. If you’re unsure about your super or want personalised advice, McKinley Plowman’s Wealth Management team is here to help you navigate the complexities and make informed decisions for your future.

Contact McKinley Plowman today to review your super and take control of your retirement – call us on (08) 9301 2200, or contact us via our website.

Please note the information provided within this article is general of nature and is not a personal advice recommendation. Prior to considering strategies discussed in this article we recommend you seek personal financial advice. Please be aware that, without the benefit of financial advice, you may be committing yourself to financial strategies or products that are not appropriate for your overall personal situation, needs and objectives.

Further reading:

• Inquiry report – Superannuation: Assessing Efficiency and Competitiveness – Productivity Commission

• Aussies to retire with $125k more thanks to higher rates | news.com.au — Australia’s leading news site for latest headlines

written by:

Aaron McCracken

Aaron has over thirty five years of experience in the financial services industry working with large companies and small businesses across all aspects of financial planning. He has broad experience across superannuation (including self-managed superannuation), investments, estate planning and personal insurance, retirement planning and business succession planning.
Aaron is passionate about the value of professional, client-focused advice and enjoys working closely with clients to help them make smart decisions with their money, as well as aiding them to clarify and achieve their financial aspirations.